It might be time for a quick handbag shopping trip to Hermès in Paris, France. Yes, yes, prices just went up in Europe. True, an eight to ten percent increase is a significant number. But, if Americans do the handbag math, and are willing to risk failure, it’s still less expensive to purchase a Hermès Birkin or Kelly abroad.
Image Credit: @favloves
Simply, prices in Europe are lower. Unlike Chanel, which aspires to global price harmonization, Hermès is less expensive in France and Europe, where production facilities are centered.
Looking solely at price tags, let’s use the Birkin 25 in Togo and the Mini Kelly in Epsom as examples. The B25, after the price increase, retails for €8,050. At the January 16, 2023, conversion rate of €1=$1.08, that is the equivalent of $8,694. That is still less than what you would pay in the United States where the bag retails for $10,100 plus applicable sales tax.
Image Credit: @bagsionista
Similarly, the mini Kelly in Epsom is less expensive in France, despite the recent price hike. As of January 16, 2023, €6,700 equals $7,236, which is still less than the $8,000 (plus sales tax) price tag in the United States.
Image Credit: @overjoyeod
One caution though. Euro strength against the dollar is growing. You could argue that a trip sooner rather than later might be better as many experts expect this to continue in the near future. And as euro value increases, the price converted into US dollars also goes up. In other words, there’s less of a deal purchasing abroad. However, there is the very real possibility that Hermès may hike prices in the United States, as well as other non-EU countries. In that instance, the span between prices in the U.S. and abroad may widen further.
But, as we know from years of handbag math, price is not the only consideration when shopping abroad. Remember to factor in the VAT refund and US sales tax. For our purposes, what would happen if PurseBop were to purchase these bags in her hometown of Chicago, Illinois?
Hermès Chicago, Image Credit: @PurseBop
Regarding the Birkin 25 in Togo leather, with a euro price of €8050, an American shopping abroad would be generally entitled to a VAT refund. For Hermès handbags the VAT generally is about 10% of the purchase price. In euros, that’s €805 or roughly $872. Deducting that from $8,694, would make the effective price $7822.
Now compare that $7822 to what PurseBop would pay in Chicago – $10,100 plus another 10% in local and state sales tax. That puts the hometown price at $11,110. If we take the US price and subtract the final Paris price the savings are significant:
$11,110 (price with sales tax in Chicago) – $7822 (Paris price with VAT refund) = $3288 (savings). The effective price paid is about 30% less in this example.
| Birkin 25 Togo | |
| US Price + Tax | $11,110 |
| Euro Price | €8,050 |
| VAT refund (10%) | €805 |
| Cost after VAT | $7,822 |
Image Credit: @r_tiff2326
One very important caveat. This does not include any US duties imposed upon return to the United States where you will be asked to and must declare purchases made abroad. Each person is entitled to an $800 exemption, but you may be assessed duty on the excess amount as determined by the customs officer. The rate could be as low as 3% or rise to 12% or more, or be waived.
Using the same handbag math for the mini Kelly 20 in Epsom leather, the cost of purchasing in Europe is:
€6700 – €670 (VAT refund) = €6030 = $6512
Now compare that to the price to be paid in Chicago: $8,250 + tax (10%) = $9,075
Without considering any US Customs duties the savings would be:
$9075 (Chicago price) – $6512 (Paris price) = $2563, or a 28% saving.
Of course, you still have to spring for airfare, lodging, and meals. But, after all, it is Paris … which is always a good idea.
| Mini Kelly 20 Epsom | |
| US Price + Tax | $9,075 |
| Euro Price | €6,700 |
| VAT refund (10%) | €670 |
| Cost after VAT | $6,512 |
Our handbag math will all change once the US prices increase in February. If US price increases are consistent with Europe, the savings will be even greater than what our math shows here.
We will update as new pricing information becomes available.
Love, PurseBop
XO
Read Related Articles:
New Confirmed Hermès Prices in Europe 2023
OMG! There’s a New Version of Hermès Mini Kelly in Town
A Supportive Husband’s Story: 10 Days in Paris Hunting Hermès Bags
Updated: January 21st, 2023
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